be certified in each State, and the compensation of such representatives shall be fixed by the Federal Trade Commission and shall be paid half by the corporation and half by the Federal Trade Commission. The Federal Trade Commission under rules and regulations upon which it shall agree with the Civil Service Commission may, for cause, revoke the certificate of any corporation representative and if any person who has not received such a certificate or whose certificate shall have been revoked shall hold himself out as entitled to act in such capacity he shall be deemed guilty of a violation of law and upon conviction thereof by any court of record of the jurisdiction in which the offense was committed he shall be fined not more than $1,000 for each such offense. Every corporation to which this paragraph is applicable shall notify all of its stockholders of the rights and privileges hereby granted.

SEC. 202. Every contract made in violation of this Act shall be void.

SEC. 203. No person or persons shall form, operate, or act as or for a corporation or association for the purpose or with the effect of violating this Act, or conspire thereto and of himself or by a co-conspirator do any act or thing to effect such conspiracy.

SEC. 204. Every corporation, association, or person violating any of the provisions of this Act shall, upon conviction thereof, in the case of a corporation or an association, be subject to a fine not exceeding per centum of its capital stock, or to a perpetual injunction against engaging in commerce, or both, and, in the case of a person, shall be subject to a fine not exceeding $10,000, and, if the violation is willful with intent to defraud or to violate any Act of Congress, to such fine and to imprisonment for not exceeding five years.

TITLE III

SEC. 301. "Bureau of Corporations" as used in this title shall mean the Federal Trade Commission.

SEC. 302. (a) The chief administrative officer of the Bureau of Corporations for the purposes of this title shall be a Commissioner of Corporations (hereinafter called "Commissioner of Corporations" and/or "Commissioner"), appointed by the President, by and with the advice and consent of the Senate. The Commissioner of Corporations shall receive a salary of $7,500 per year and shall serve for a term of four years, shall be eligible for reappointment, and shall not engage in any other business, vocation, or employment.

(b) The Bureau of Corporations shall appoint such employees and, without regard for the provisions of the civil-service laws or the Classification Act of 1923, as amended, appoint and fix the compensation of an executive secretary, assistant executive secretaries, and such attorneys and special experts, not more than five in number, as he may from time to time find necessary for the proper performance of the functions of the Bureau and as may be approved by the Bureau of Corporations and from time to time appropriated for by Congress. SEC. 303. Any five or more persons, citizens of the United States, each of the age of twenty-one years or upward, may, upon complying with the requirements of this Act, form a corporation to engage in trade or commerce with foreign nations, or among the several States, or between a State or States, or between any Territories of the United States, or in and between any such Territory or Territories and any State or States and the District of Columbia or places under the jurisdiction of the United States, or between the District of Columbia and any State or States and foreign nations or places under the jurisdiction of the United States, or for all or any of such kinds of trade and commerce.

SEC. 304. The persons uniting to form such corporation shall make and subscribe articles of association, which shall specifically set forth: First, the name of the proposed corporation, with the addition of the words "national incorporation" as the last words thereof, which name shall be subject to the approval of the Commissioner of Corporations; second, the place in which the principal business office of the corporation is to be situated, designating the State, Territory, or District, and the particular county and city, town, or village; third, the object for which the proposed corporation is to be established, stating the general nature of the interstate or foreign trade or commerce which it is formed to carry on; fourth, the amount of the capital stock of the proposed corporation, which shall not be less than $100,000, and the amount with which it is to commence business, which shall not be less than $10,000, and whether or not any part of the capital stock is to be contributed in property other than money, and if so, the amount of such part; fifth, the number of shares into which the capital stock is to be divided and the par value, if any, of such shares, and if

a portion of such shares are to have no par value, then specifying such portion; whether or not such shares are to be divided into classes, and if so, the amount of each class and a statement of the preferential and other special rights of each class: Provided, That no nonvoting stock shall be authorized or issued; sixth, the number of directors, and if they are to be divided into two or more classes, the number of directors to constitute each class and the terms of office of each class, respectively, and the names and post-office addresses of the directors for the first year and the name and post-office address of a treasurer of the corporation to serve until the election of officers for the first year; seventh, the period limited for the duration of the company, not exceeding fifty years; eighth, in case the corporation is formed for the purpose of acquiring the property and business of any existing corporation, the articles shall specify the amount of any indebtedness of such existing corporation payment whereof is to be assumed by the new corporation, and what, if any, amount of such indebtedness is secured by mortgage or other lien upon the property to be so acquired; ninth, any other provision which the incorporators may choose to insert in the articles for the regulation of the business and the conduct of the affairs of the corporation; and any provisions defining, limiting, and regulating the powers of the corporation, its officers, directors, or stockholders, or of any class or classes of stockholders: Provided, That the provisions inserted pursuant to this clause ninth be approved by the Commissioner of Corporations as not inconsistent with this Act or with any other Act of Congress; tenth, the fact that the articles are made to enable such persons to avail themselves of the advantages of this Act; eleventh, the names and places of residence of the respective subscribers to the articles and the number of shares which each of them agrees to take in the corporation, which must aggregate not less than the amount specified in the articles as that with which the corporation is to commence business.

SEC. 305. The articles of association shall be acknowledged by each subscriber before an officer authorized to take the acknowledgment of deeds for purposes of record at the place or places where they are so signed and acknowledged, and shall be authenticated by the seal of such officer and the certificate to his official character of the clerk of the court or county or other officer with whom his commission is requested by law to be filed or recorded; and the articles of association so acknowledged and authenticated shall be transmitted to the Commissioner of Corporations.

SEC. 306. It shall be the duty of the Commissioner of Corporations to examine such articles, and if, in his opinion, they conform to the requirements of this Act and contain no provision which is contrary to any other Act of Congress, and if the name proposed to be adopted by such corporation is not the same as or so nearly resembling the name of another existing corporation organized under this Act, or by any other Act of Congress, or the name of any other corporation registered in the Bureau of Corporations pursuant to section 307 hereof, as to be calculated to deceive, he shall, upon payment of the fees provided in this Act, file the said articles in his office and record the same in a book to be kept by him for the purpose, and, upon proof satisfactory to him that the amount of the capital with which the corporation is to commence business has been paid in cash to the treasurer named in the articles, he shall thereupon issue a copy of said articles so filed, together with a certificate, under his hand and seal of office that the incorporators have complied with all the provisions of law required to be complied with and have become and are a national corporation under the name and are authorized to have succession for the period. specified in the articles of association. Such certificate, which is hereinafter described as the organization certificate, shall be in the form prescribed in schedule A of this Act, and thereupon and from the date of such certificate the said incorporators and their respective successors shall be and become a body corporate, having succession for the period in said articles mentioned, and as such, and in the name designated therein shall have and may exercise the powers specified in this Act, and all powers necessary or proper to the effective exerecise of the powers herein specifically granted.

SEC. 307. Any corporation existing under the laws of any State or Territory of the United States or the District of Columbia, upon the payment of a fee of $5, may file in the Bureau of Corporations a duly certified copy of its charter together with proof, by affidavit, of its president or vice president and secretary or treasurer, that it is engaged in business pursuant to such charter, specifying in such affidavit the location of its principal office and the principal places in which it is engaged in conducting its business.

The Commissioner of Corporations shall cause a book to be kept in his office to be called the "corporation name index", in which shall be entered the name, State in which incorporated, date of incorporation, and character of business of every corporation filing its charter in accordance with this section, and the date of such filing, and the Commissioner shall on written request and on payment of a fee of $1 furnish any person so requesting the same with the names of all corporations entered therein containing any word or words specified in such written request.

If, in the opinion of the Commissioner, the articles of association transmitted to him for approval hereunder shall contain any provision at variance with this. Act or any other Act of Congress, or if the name selected for said corporation shall be the same as the name of any other existing corporation engaged in the same or a similar business, and organized under this Act, or under any other Act of Congress, or which being organized under the laws of any State or Territory, shall have filed a copy of its charter in the Bureau of Corporations in compliance with this section, or so nearly resembling the same as to be calculated to deceive, the Commissioner shall refuse to file said articles of association.

SEC. 308. Every corporation formed as herein provided shall have the following powers: First, to adopt and use a corporate seal and alter same at pleasure; second, to have succession for the period specified in its articles of association, unless it is sooner dissolved by the act of its shareholders owning two-thirds of its stock, or unless its existence is terminated by reason of some other provision of law; third, to acquire by grant, gift, purchase, devise, or bequest, and to hold and dispose of such property, real and personal, as the corporation shall require or find useful in its business, subject to such limitations as may be prescribed by law; fourth, to carry on the general kind of interstate or foreign trade and commerce specified in the articles of association, with foreign nations or among the several States, or between a State or States and places subject to the jurisdiction of the United States, or between any Territories of the United States, or in or between any such Territory or Territories and any State or States and the District of Columbia or places under the jurisdiction of the United States, between the District of Columbia and any State or States or foreign nations or places under the jurisdiction of the United States, or with the Indian Tribes, and to produce or manufacture in any State, Territory, or district any of the articles or commodities which are the subject of the interstate or foreign commerce carried on or proposed to be carried on by it, and incidentally to carry on intrastate business to the extent necessary to enable it to function as an efficient business unit; fifth, to sue and be used, complain and defend in any court of law or equity, having jurisdiction, as fully as natural persons may do; sixth, to elect or appoint a board of directors and an executive committee, and by its board of directors to appoint a president, vice president, secretary, treasurer, and other officers or agents, define their duties, prescribe their qualifications, dismiss such officers or any of them at pleasure, and appoint others to fill their places; seventh, to make bylaws not inconsistent with this Act or any other Act of Congress for the management of its property, the regulation of its affairs, the transfer of its stock, and the calling of meetings of its members. Such bylaws may also fix the amount of tsock which must be represented at meetings of the stockholders to constitute a quorum, unless otherwise provided by law, but the holders of at least a majority of the stock shall be required to be present in person or by proxy to constitute a quorum for the transaction of business but a smaller number may be authorized to adjourn the meeting from time to time until a quorum shall be obtained. The bylaws shall also provide regulations for the issue of new certificates of stock in place of lost or destroyed certificates. Bylaws shall be adopted by the stockholders, unless it is provided in the articles of association that the bylaws may be made by the board of directors, in which case bylaws may be so adopted, subject to alteration or repeal by the stockholders at their pleasure. Bylaws adopted at a meeting of the stockholders shall control the action of the directors, but no bylaws shall be effective until two weeks after a copy of the same, duly certified by the secretary of the corporation under its seal, shall have been filed in the Bureau of Corporations, unless such time shall be duly waived by writing, signed by the holders of all the stock and duly acknowledged in like manner as the articles of association and filed with said bylaws in the Bureau of Corporations.

SEC. 309. If in the original or amended articles of association any informality be found to exist, or said articles be found to contain any matter not authorized by law to be stated therein, or if the proof or acknowledgment thereof shall be defective, the incorporators or the directors of the corporation may, with the written approval of the Commissioner of Corporations, make and file amended articles correcting such informality or defect, or striking out such unauthorized matter, and thereupon the Commissioner shall issue under his hand and official seal an amended organization certificate, whereupon the original articles of association shall be deemed to be amended accordingly as of the date when such original organization certificate was issued, and the corporation shall then for all purposes be deemed to be a corporation with the organization and powers in the amended articles of associatoin contained as and from the date of the issue of the original certificate.

The organization certificate and any amended organization certificate issued by the Commissioner of Corporations, pursuant to the provisions of this Act, shall be presumptive evidence of the existence of the corporation named therein in every court and place.

SEC. 310. The articles of association may also provide that all elections of directors of such corporation each stockholder shall be entitled to as many votes as shall equal the number of his shares of stock multiplied by the number of directors to be elected, and that he may cast all of such votes for a single director, or may distribute them among the number to be voted for, or any two or more of them, as he may see fit, which right, when exercised, shall be termed cumulative voting.

SEC. 311. No corporation formed pursuant to this Act shall purchase, acquire, or hold stock in any other corporation, nor shall any corporation organized under this Act or under the laws of any State or foreign country for the purpose of or engaged in carrying on the like business to that of a corporation formed pursuant to this Act acquire or hold the stock of such last-mentioned corporation, and any attempted transfer of such stock contrary to this provision shall be null and void. No corporation formed pursuant to this Act shall, by any implication or construction, be deemed to possess the power of carrying on the business of discounting bills, notes, or other evidence of debt, or of receiving deposits or buying and selling bills of exchange, nor shall it issue bills, notes, or other evidence of debt for circulation as money.

SEC. 312. The business of every corporation organized hereunder shall be managed by its directors, who shall, respectively, be shareholders therein. They shall be not less than five in number, and, except as hereinafter provided, they shall be chosen annually by the stockholders at the time and place provided by in the bylaws, and shall hold office for one year, or until others are chosen and qualified in their stead; but by so providing in its articles of association or in amended articles adopted as herein provided, any corporation organized under this Act may classify its directors in respect to the time for which they shall severally hold office, the several classes to be elected for different terms: Provided, That no class shall be elected for a shorter period than one year or for a longer period than five years, and that the term of office of at least one class shall expire in each year. Any corporation having more than one kind of stock may, by so providing in its articles of association or in amended articles duly adopted, confer the right to choose the directors of any class, or a specified number of directors, upon the stockholders of any particular class or classes to the exclusion of the others. At least a majority of the directors shall at all times be citizens of the United States and bona-fide residents therein.

The articles of association or any amended articles adopted herein provided may provide that the powers of the board of directors shall be exercised by an executive committee, composed of not less than a maiority of the whole number of directors, to be chosen by the votes of a majority of the whole board, which committee shall have and may exercise, except when the board is in session, all the powers of the board, except such as are by this Act required to be exercised by the board of directors itself, and except the power to declare dividends; and may also provide that members of the board of directors other than those constituting the executive committee shall not be liable in any respect except for the exercise of good faith and due diligence in respect to matters brought before meetings of the board of directors duly held and attended by them.

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SEC. 313. The incorporators named in any articles of association, before the payment of any part of the capital, and before beginning the business for which the corporation was created, may surrender all their corporate rights and franchises by filing in the Bureau of Corporations a certificate signed by all the incorporators and verified by oath, stating that no part of the capital which has been paid in has been expended, that such business has not been begun, and no indebtedness has been contracted, and surrendering all rights and franchises, and thereupon the said corporation shall be dissolved.

SEC. 314. Every corporation organized under this Act shall have power to create two or more kinds of stock of such classes, with such designations and preferences but with equal voting powers, and such restrictions or qualifications thereof as shall be stated and expressed in the articles of association, or in any amendment thereof which shall be filed with the approval of the Commissioner of Corporations; and the power to increase or decrease the stock as in this Act provided shall apply to all or any such classes of stock. But at no time shall the total amount of preferred stocks issued and outstanding exceed twothirds of the capital stock paid for in cash or property, and any class of preferred stock may, if desired, be made subject to redemption at a price not less than the par value of said stock, if it have any par value, otherwise at not less than a price to be specified in the certificates of said stock; and the holders of such preferred stock shall be entitled to receive and the corporation shall be bound to pay thereon dividends, at such rates and on such conditions as shall be stated in the articles of association or amended articles, quarterly, half-yearly, or yearly, and such dividends shall be made payable before any dividends shall be set apart or made payable on the common stock and such dividends may be made cumulative. But no preferred stock shall be authorized except as specified in the original articles of association save with the consent of the holders of two-thirds of each class of stock outstanding at the time of such authorization, given at a meeting called to consider the same, of which not less than two weeks' notice shall have been given in the manner provided in section 318 hereof. Every stockholder shall be entitled to a certificate signed by the officers of the corporation, designated for such purposes in the bylaws, certifying the number and class of shares owned by him in such corporation.

SEC. 315. Every corporation organized under this Act shall keep at its principal office a book to be known as a "stock book", containing the names alphabetically arranged of all persons who are stockholders of the corporation, showing their places of residence, the class and number of shares of stock held by them, respectively, the time when they respectively became the owners thereof, and the amount paid thereon, which stock book shall at all times during the usual hours for business be open for the inspection of its stockholders, judgment creditors, and any officer authorized by law to investigate the affairs of such corporation. For any refusal to allow such book to be inspected by any person hereby authorized to inspect the same, such corporation and the officer so refusing shall each forfeit the sum of $50, to be recovered in an action by the United States in the district where the principal office of the corporation is situated.

Jurisdiction is hereby conferred upon the respective district courts of the United States to enforce, by mandamus or other appropriate proceeding, the right of inspection given by this section.

SEC. 316. No transfer of stock shall be valid as against the corporation, its stockholders, and creditors for any purpose, except to render the transferee liable for the debts of the corporation according to the provisions of this Act, until it shall have been entered in such book as required by this section, by an entry showing from and to whom transferred. The stock book of every corporation shall be presumptive evidence of the facts therein stated in favor of the plaintiff in any action or proceedings against such corporation, or any of its officers, directors, or stockholders.

The shares of stock in every such corporation shall be personal property and shall be transferred on the books of the corporation in such manner and under such regulations as the bylaws provide, and whenever any transfer of shares shall be made as collateral security and not absolutely, it shall be so expressed in the entry of the transfer.

SEC. 317. If the whole capital stock shall not have been subscribed at the time of filing the articles of association, the directors named in the articles may open books of subscription to fill up the capital stock, in such places and